TheStreet.com's Jim Cramer says the companies could deliver money to shareholders without sacrificing growth. What happens if the oil companies start actually recognizing their good fortune -- their sustainable good fortune -- and start boosting dividends the way that Tidewater (NYSE: TDW) (Cramer's Take) did last week with its 67% hike.
Throughout this great run with oil and gas, it seems that the companies themselves haven't caught up with the good fortune. They haven't spent that much on drilling relative to profits, and they have chosen to buy a lot of stock back, never bad. But what if they start returning the profits to shareholders in the form of dividends?
I think that what could happen is that you wouldn't think that Chevron (NYSE: CVX) (Cramer's Take) and Occidental Petroleum (NYSE: OXY) (Cramer's Take) and Exxon (NYSE: XOM) (Cramer's Take) are such nose-bleeders.
If you go back and look at the presentations of Conoco (NYSE: COP) (Cramer's Take) -- a very pro-shareholder company -- you'll see how the dividend could be boosted hugely without hurting the growth of the company.
I am betting that Tidewater may not be an isolated example. This group could provide a lot of good dividend news this year, another reason that if and when oil comes back to $120 -- where I think it will go before going over its previous highs -- you want to buy the stocks, not sell them.
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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.
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Reader Comments (Page 1 of 1)
6-03-2008 @ 9:47AM
Scooter Griffin said...
EXCO (xco) sitting on 10's of 1000's of acres in North Louisiana and East Texas where the newest/hottest Shale Play is developing "HAYNESVILLE SHALE PLAY". And, their acreage is predominantly held by existing production. Right Place, Right Time!!!
Their stock has been setting new 5 year highs the Play Developes.
Chesapeake is also a major leaseholder in this Play.
6-07-2008 @ 7:37PM
jo said...
Isn't that one of the SMOOTH SAILING GUYS SMOOTH FOR HIM AND GEORGE!